For encouraging foreign investment, certain incentives are available to certified investors under the Investment Promotion Act of 2009. The provisions of the Investment Promotion Act have been annulled by the Taxation Amendment Act 2016, which expressly provides for the cancellation of any incentives or tax relief measures, unless specifically provided for under the Taxation Act. However, this measure will be in effect only on specific intimation to taxpayers regarding implementation of this change.

Incentives available to foreign investors include concessions for machinery and equipment in qualified investment priority areas, capital allowances, accelerated depreciation as well as allocation of government land for investment.

Initial allowances or accelerated depreciation may be granted for certain assets as below:

Asset	Nature of allowance	Percentage	Industry
Plant and machinery	Initial allowance	50%	Relatively developed areas
Plant and machinery	Initial allowance	75%	Least developed areas
Industrial building	Initial allowance	20%	NA
Farm works	Initial allowance	30%	NA
Repairs and minor capital equipment	Accelerated depreciation	100%	NA
Specific classes of capital assets	Annual allowance	10% to 40%	NA

Several other incentives are also available as below:

Deduction for expenses	Years for which deduction is granted	Percentage	Industry
Start-up and development costs	4	25%	Relatively developed areas
Start-up and development costs	4	40%	Least developed areas
Research and development expenditure	3	100%	NA
Research and development expenditure	After 3 years	25%	NA
Training and capacity building expenditure	1	100%	NA
Mineral exploration and drilling expenditure	1	100%	NA

Powerful Tax Solutions

Tax Rules Engine

Collaboration Tools

Latest Tax News